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TSX: FT
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Fortune Minerals Limited
is focused on building the next diversified mining company.
Fortune operates the Revenue Silver Mine in Colorado and
is developing the fully vertically integrated NICO goldcobalt-bismuth-copper project that comprises a mine and
mill in the Northwest Territories that will produce a bulk
concentrate for shipment to a refinery in Saskatchewan
for processing to high value metal products. In addition,
Fortune is developing the Arctos anthracite metallurgical
coal project in British Columbia and owns the Sue-Dianne
copper-silver-gold deposit and other exploration projects in
the Northwest Territories.
Fortune is establishing a diversified production profile of
precious, base and specialty metals and premium coals.
The Company is positioned to become a reliable North
American producer of commodities critical to a growing
world economy. This is particularly important given the risk
to the global supply chain with geographic concentration
of three of its commodities - cobalt, bismuth and anthracite
metallurgical coal – in countries that present supply
concerns. Fortune’s primary assets also contain significant
resources and reserves of gold and silver that provide a
precious metal countercyclical hedge.
Leveraging its strategic relationships, experienced team
and asset base, Fortune is positioned to grow through
organic development of its late-stage development assets,
and through acquisitions in mining-friendly jurisdictions in
politically stable countries.
WHY INVEST?
• Proven management team with experience acquiring, financing, developing & operating mines
• Low-risk producer with two late stage development
assets in North America
• Cash flow generation from silver mine in Colorado
• Well-defined two tier growth strategy
i. Development projects and exploration
ii. Growth through acquisition
• Strategic investments by Procon Resources & POSCO
FORTUNEMINERALS.COM
North American Focus
The Revenue Silver Mine is a producing silver
mine with gold, lead & zinc by-product credits.
Located in southwest Colorado, U.S.A., this
historical 15 million oz silver producer has M&I
Resources containing 16.3 million ounces of
Ag & Inferred Resource containing 10.1 million
ounces of Ag.
The NICO deposit in the Northwest Territories
contains 1.1 million ounces of gold, significant
cobalt and 12% of global bismuth reserves with
by-product copper. Positive feasibility studies,
test mining, pilot plants and environmental
assessments have already been completed.
Negotiations are underway for project financing.
The SMPP is a proposed refinery near
Saskatoon in western Canada that will process
metal concentrates from NICO. Together with
NICO, the SMPP is positioned to become
a reliable fully integrated North American
producer of gold, bismuth metals & chemicals,
cobalt chemicals and copper.
The Arctos Anthracite Project is one of the
world’s premier metallurgical coal projects with
very large resources and reserves of high rank
anthracite metallurgical coal in northwest
British Columbia, Canada. Arctos is an
international collaboration between
Fortune & POSCO and is currently in the
environmental assessment process.
Head Office in London, Ontario.
BUILDING THE NEXT DIVERIFIED PRODUCER
Colorado, U.S.A.
THE REVENUE SILVER MINE
Producing silver, gold, lead & zinc
In May 2014, Fortune announced the staged acquisition of the fully permitted and constructed Revenue Silver Mine in
southwestern Colorado, U.S.A. Fortune is the operator of this mine that had historical production of ~15 million ounces of silver
and is ramping up production to 400 tons per day. The mine is situated on 147 patented and unpatented mining claims, totaling
approximately 1,080 acres. High-grade, narrow silver-gold-lead-zinc-copper veins are being mined by underground mining
methods to feed a 400 ton per day underground crushing and grinding plant, and concentrator. The concentrates are sold under
off-take agreements with Teck Resources Limited and Johnson Matthey. The mine is serviced by roads connected to the Colorado
highway system, electrical grid, and other services. There is an operating team of ~90 people already in place leveraging a pool of
skilled mine labour in this historic mining district. Fortune currently owns a 12% participating interest in the Revenue Silver Mine
and can earn a 100% interest by making a cash payment of US$ 14 million to the majority owner byContained
September
2, 2014.
Metal
Ag
Au
Area
Category
Tons Resources
Virginius
Vein
Mineral
(opt)
(opt)
Pb
(%)
Cu
(%)
Zn
(%)
Ag
(M oz)
Au
(oz)
Pb
Cu
(M lb)
(M lb)
Contained Metal
Zn
(M lb)
Ag
13.1
(M oz)
Au
21,000
(oz)
Pb41.8
(M lb)
Cu2.4
(M lb)
Zn
13.3
(M lb)
Area
Revenue
Virginius
Category
Indicated
Tons
485,600
Ag
(opt)
26.95
Au
(opt)
0.044
Pb
(%)
4.30
Cu
(%)
0.25
Zn
(%)
1.37
Revenue
Revenue
Virginius
Virginius
Inferred
Indicated
646,100
485,600
14.93
26.95
0.038
0.044
3.04
4.30
0.13
0.25
0.99
1.37
9.65
13.1
24,500
21,000
39.25
41.8
1.6
2.4
12.8
13.3
Revenue
Virginius
Inferred
646,100
14.93
0.038
3.04
0.13
0.99
9.65
24,500
39.25
1.6
12.8
• *Cut-off is based on a minimum total recovered metal based on a mining and milling cost provided by Silver Star Resources LLC of $150/t and diluted to a minimum mining width of 3 feet.
• Recoveredblockmodelmetalvalue=(Agoz/t •Agrecovery •US$/ozAg)+(Auoz/t •Aurecovery •US$/ozAu)+(2000•Pb%/100 •Pbrecovery •US$/lbPb)+ (2000 •Zn%/100 •Znrecovery •US$/lbZn).
• The metal price and recovery assumptions include a silver (“Ag”) price of US$20/oz and recovery of 95%; gold (“Au”) price of US$1250/oz and recovery of 90%; a copper (“Cu”) price of US$3.15/lb and recovery of 80%; a lead (“Pb”) price of US$1/lb
and recovery of 90%; and a zinc (“Zn”) price of US$1/lb and recovery of 85%.
Yellow Rose Vein Mineral Resources
Contained Metal
Area
Category
Tons
Ag
(opt)
Au
(opt)
Pb
(%)
Zn
(%)
Yellow Rose
Area
Measured
Category
215,300
Tons
Ag
10.08
(opt)
Au
0.034
(opt)
Pb
1.71
(%)
Zn
1.69
(%)
Yellow Rose
Indicated
100,700
10.92
0.036
1.96
Yellow Rose
Measured & Indicated
215,300
316,100
10.08
10.35
0.034
0.035
Yellow Rose
Indicated
Inferred
100,700
38,100
10.92
11.01
0.036
0.025
Ag
(M oz )
Au
Pb
(oz)
(M lb)
Contained Metal
Zn
(M lb)
1.74
2.17
Ag
(M oz )
1.10
6,400
Au
(oz)
4,000
7.37
Pb
(M lb)
3.95
7.28
Zn
(M lb)
3.5
1.71
1.79
1.69
1.71
2.17
3.27
6,400
10,490
7.37
11.31
7.28
10.78
1.96
1.69
1.74
0.92
1.10
0.49
4,000
700
3.95
1.28
3.5
0.701
Roseon a minimum Measured
& Indicated
316,100
1.79
3.27
10,490
11.31
10.78
•Yellow
*Cut-off is based
total recovered metal
based on a mining and milling cost provided
by Silver Star 10.35
Resources LLC of0.035
$150/t and diluted
to a minimum1.71
mining width of 3 feet.
• Recovered block model metal value = (Ag oz/t • Ag recovery • US$/oz Ag) + (Au oz/t • Au recovery • US$/oz Au) + (2000 • Pb % / 100 • Pb recovery • US$/lb Pb) + (2000 •Zn%/100 •Znrecovery •US$/lbZn).
• The metal price and recovery assumptions include a silver (“Ag”) price of US$20/oz and recovery of 95%; gold (“Au”) price of US$1250/oz and recovery of 90%; a lead (“Pb”) price of US$1/lb and recovery of 90%; and a zinc (“Zn”) price of US$1/lb
and recovery
of 85%.
Yellow
Rose
Inferred
38,100
11.01
0.025
1.69
0.92
0.49
700
1.28
0.701
SRK PEA
• After Tax IRR of 73.2%
• After tax 6% NPV of
$58.85 Million
FORTUNEMINERALS.COM
• EBITDA of US$ 17.54
Million per year
BUILDING THE NEXT DIVERIFIED PRODUCER
Northwest Territories & Saskatchewan, Canada
THE NICO PROJECT & SMPP
Fully integrated project with gold, cobalt, bismuth & copper
The NICO Project comprises a proposed mine and mill in the Northwest Territories that will produce a bulk concentrate for
shipment to the planned Saskatchewan Metals Processing Plant (SMPP) for processing to high value metal products. $110
million of work has been completed at NICO including test mining, pilot plant processing and a positive Feasibility Study.
Together with the SMPP, NICO is positioned to become a fully integrated North American source of gold, bismuth metals &
chemicals, and cobalt chemicals.
The mine and SMPP have also received their respective Environmental Assessment approvals, Fortune has secured Procon
Resources as a strategic investor, and negotiations for project financing are advancing with the objective of commencing
construction activities as soon as project financing is completed.
Over one million ounces of gold reserves as counter cyclical hedge
Cobalt
Bismuth
• Needed to manufacture rechargeable batteries
• Used primarily in automotive sector and medical products
• Supply concerns with 61% of mined cobalt sourced from Congo and 43% of it refined in China
• NICO is positioned to become the only fully integrated North American cobalt chemical source, and potential key supplier to rechargeable battery industry including companies such as Tesla Motors
• Increased use as environmentally friendly non-toxic lead replacement supported by legislation banning lead
• High risk of supply disruptions with 80% of mine production
concentrated in China
• NICO contains 12% of global bismuth reserves
NICO Mineral Reserves
Underground Mineral Reserves
Tonnes
Au (g/t)
Co (%)
Bi (%)
Cu (%)
Proven
282,000
4.93
0.14
0.27
0.03
Probable
295,000
5.00
0.07
0.07
0.01
Total
577,000
4.96
0.10
0.17
0.02
Open Pit Mineral Reserves
Tonnes
Au (g/t)
Co (%)
Bi (%)
Cu (%)
Proven
20,453,000
0.92
0.11
0.15
0.04
Probable
12,047,000
1.03
0.11
0.13
0.04
Total
32,500,000
0.96
0.11
0.14
0.04
Tonnes
Au (g/t)
Co (%)
Bi (%)
Cu (%)
Proven
20,735,000
0.97
0.11
0.15
0.04
Probable
12,342,000
1.13
0.11
0.13
0.04
Total
33,077,000
1.03
0.11
0.14
0.04
1,100,000
ounces
82,300,000
pounds
102,100,000
pounds
27,200,000
pounds
Combined Mineral Reserves
Contained Metal
MICON Feasibility Study
• 15.6% levered Base Case
pre-tax IRR
• $254 million Levered Base Case
pre-tax 7% NPV
• Negative to low cash costs for
metals net of by-product credits
• CAPEX $589 million (includes
$243 million for SMPP)
Sums of the combined reserves may not exactly equal sums of the
underground and open pit reserves due to rounding error.
Photo credit: Tesla Motors
FORTUNEMINERALS.COM
BUILDING THE NEXT DIVERIFIED PRODUCER
British Columbia, Canada
THE ARCTOS ANTHRACITE PROJECT
Anthracite metallurgical coal
The Arctos Anthracite Project is one of the world’s premier metallurgical coal developments and an international collaboration
between Fortune Minerals (80%) and the Canadian subsidiary of South Korea’s POSCO (20%). Arctos is currently in the BC
Environmental Assessment Process for the expansion of the railway infrastructure and for the development of an open pit mine
and wash plant to produce at the initial rate of 3 million tonnes of coal products per annum over 25 years.
Arctos has safely advanced with $110 million invested to date including work on resource delineation, environmental &
feasibility studies, test mining, pilot plants and trial cargos to customers in North America, Asia and Europe.
Marston Feasibility Study
Anthracite
• Railway transportation solution to deep sea port
• Highest quality coal, represents only 1% of world coal reserves
• 17% pre-tax IRR
• C$ 616 million pre-tax 8% NPV
• Metallurgical coal with diverse applications such as carbon filters for
water purification
• LOM FOB cash cost $128/tonne
• Supply concerns as China is the dominant producer & net importer
• CAPEX C$788.6 million
ARCTOS GLOBAL RESOURCES (Million tonnes)
Area
Measured
Indicated
M&I
Inferred
Lost Fox
Area
Hobbit-Broatch
Lost Fox
Summit
Hobbit-Broatch
Lost Fox Extension
Summit
Total
Lost Fox Extension
107.9
Measured
–
107.9
–
–
–
–
107.9
–
109.5
Indicated
13.5
109.5
–
13.5
–
–
123.0
–
217.4
M&I
13.5
217.4
–
13.5
–
–
230.9
–
91.5
Inferred
258.4
91.5
9.6
258.4
–
9.6
359.5
–
107.9
123.0
230.9
359.5
Total
LOST
FOX METALLURGICAL
COAL
Coal Resources
Run-of-Mine Coal Reserves
RESERVES AND RESOURCES (Million tonnes)
Measured Indicated
Coal Resources
172.4
20.4
Measured Indicated
172.4
20.4
Inferred
12.1
Inferred
12.1
Proven Probable
Total
Run-of-Mine Coal Reserves
115.0
9.9
124.9
Proven Probable
Total
115.0
9.9
10% Ash Product Reserves
Proven Probable
Total
10% Ash Product Reserves
64.4
4.8
69.2
Proven Probable
Total
124.9
64.4
4.8
69.2
The scientific and technical information with respect to the RSM contained in this presentation is based on the technical
report dated July 23, 2014 prepared by SRK Consulting entitled “NI 43-101 Technical Report Preliminary Economic
Assessment The Revenue Mine, Sneffels, Colorado” (the “SRK Technical Report”) which includes a preliminary economic
assessment (the “SRK PEA”), a copy of which is available for review on SEDAR at www.sedar.com under the Company’s
profile. The SRK Technical Report was authored by Dorinda Bair, BSc Geology, CPG, Principal Consultant (Geology), James M.
Beck, Bsc Mining Engineering, PE, SRK Associate Consultant (Environmental), Mark K Jorgensen, BSc Chemical Engineering,
SRK Associate Consultant (Metallurgy), and Joanna Poeck, BEng Mining, Senior Consultant (Mining Engineer), all of whom are
Qualified Persons for the purposes of National Instrument 43-101 (“NI 43-101”). The SRK Technical Report was also subject
to peer review as part of SRK’s own internal process by Bret Swanson, BEng Mining, Principal Consultant (Mining Engineer).
The SRK PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically
to have economic considerations applied to them that could enable them to be categorized as mineral resources. There is no
certainty that the SRK PEA will be realized.
The scientific and technical information with respect to the NICO Project contained in this presentation is based on the
technical report dated May 5, 2014 prepared by Micon International entitled “Technical Report on the Feasibility Study for
the Nico Gold-Cobalt-Bismuth-Copper Project, Northwest Territories, Canada” (the “Micon Technical Report”) prepared by
Harry Burgess, P.Eng., Richard M. Gowans, P.Eng., B. Terrence Hennessey, P.Geo., Christopher R. Lattanzi, P.Eng. and Eugene
Puritch, P.Eng., the qualified persons for the purposes of NI 43-101, a copy of which is available for review on SEDAR at www.
sedar.com under the Company’s profile.
The scientific and technical information with respect to the Arctos Anthracite Project contained in this presentation is based
on the technical report dated November 28, 2012 prepared by Golder Associates entitled “Technical Report on the 2012
update of the Arctos Anthracite Project Mine Feasibility Study” prepared by Edward H. Minnes, P.E., the qualified person for
purposes of NI 43-101, a copy of which is available for review on SEDAR at www.sedar.com under the Company’s profile.
Mineral resources referred to herein are not mineral reserves and do not have demonstrated economic viability. There is no
certainty that all or any part of the mineral resources estimated will be converted into mineral reserves. The mineral resource
estimates include inferred mineral resources that are normally considered too speculative geologically to have economic
considerations applied to them that would enable them to be categorized as mineral reserves. There is also no certainty that
inferred mineral resources will be converted to measured and indicated categories through further drilling, or into mineral
reserves, once economic considerations are applied. Mineral resource tonnage and contained metal as disclosed herein have
been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.
The disclosure of scientific and technical information contained in this document has been approved by Robin Goad, M.Sc., P.Geo., President and Chief Executive Officer of Fortune Minerals Limited, who is a “Qualified Person” under National Instrument 43-101.
This document contains certain forward-looking information. This forward-looking information includes statements with respect to, among other things, the size and quality of the Company’s mineral resources, progress in development of mineral properties,
timing and cost for placing the Company’s mineral projects into production, costs of production, amount and quality of metal products recoverable from the Company’s mineral resources, internal rates of return to be generated by and net present values of the
Company’s mineral projects, demand and market outlook for metals and coal and future metal and coal prices. Forward-looking information is based on the opinions and estimates of management as well as certain assumptions at the date the information
is given (including, in respect of the forward-looking information contained in this document, assumptions regarding the Company’s ability to arrange necessary financing for its projects, including without limitation the financing necessary to acquire a 100%
interest in the Revenue Silver Mine, and obtain all necessary permits for the Arctos project, the NICO project and the SMPP and assumptions regarding future metal and coal prices, the capital and operating costs of the Arctos project, the NICO project and the
SMPP, the anticipated production from the Arctos project, the NICO project and the SMPP and the ability of the Company to increase production at the Revenue Silver Mine). However, such forward-looking information is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. These factors include the inherent risks involved in the exploration and development of mineral properties, the risk
that the Company may not be able to arrange the necessary financing to complete the acquisition of the Revenue Silver Mine or construct and operate the Arctos project, the NICO mine or the SMPP, uncertainties with respect to the receipt or timing of required
permits and regulatory approvals, the risk that the Company may not be able to increase production at the Revenue Silver Mine, the risk that production from the Arctos project, the NICO project and the SMPP may be less than anticipated, the uncertainties
involved in interpreting drilling results and other geological data, fluctuating metal and coal prices, the possibility of project cost overruns or unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future,
uncertainties related to metal recoveries and other factors. In addition, the risk factors described or referred to in the Company’s Annual Information Form for the year ended December 31, 2013, which is available on the SEDAR website, should be reviewed in
conjunction with the information contained in this document. Readers are cautioned to not place undue reliance on forward-looking information because it is possible that predictions, forecasts, projections and other forms of forward-looking information will
not be achieved by the Company. The forward-looking information contained herein is made as of the date hereof and the Company assumes no responsibility to update them or revise it to reflect new events or circumstances, except as required by law.
KEY PERSONNEL:
• Robin Goad (President, CEO & Director)
• Adam Jean (Vice President Finance & CFO)
• Mike Romaniuk (Vice President Operations & COO)
• Rick Schryer (Director Regulatory & Environmental Affairs)
MARKET INFORMATION:
Basic Shares Outstanding (Aug 12, 2014) .....190 M
Fully Diluted Shares (Aug 12, 2014) ...............199 M
Working Capital (Q2 2014) .............................$6.1 M
CONTACT INFORMATION:
IR Manager: Troy Nazarewicz
Telephone: 519-858-8188 | Toll Free Canada & US 877-552-7726
Address: Suite 1600-148 Fullarton St. London, Ontario, Canada, N6A 5P3
[email protected] | fortuneminerals.com
OWNERSHIP:
Procon Resources Inc. ...................19%
Directors, Officers & Insiders
(including Procon) ...........................35%
Aug 2014